The Greater Vancouver real estate market is a subject of interest and speculation for many. The latest statistics published by the Real Estate Board of Greater Vancouver (REBGV) shed light on the market’s performance in July. While the numbers may indicate a decline in some areas, a closer look reveals positive year-over-year growth and a balanced market. In this article, we will analyze the key metrics, explore the sales-to-new-listings and sales-to-active-listings ratios, discuss the impact of the Bank of Canada’s policies, and examine the trends in home prices.
Market Activity and Listings
In July, the Greater Vancouver real estate market saw a total of 2,428 home sales, representing an 18.2% decrease from May but a 27.5% improvement compared to July 2022. Similarly, there were 4,649 new listings, which marked a 13.1% decrease from May but a 16.9% improvement from July 2022. These numbers indicate a decline in market activity month-to-month but a significant year-over-year increase.
The total active residential listings in July stood at 9,764, up from 9,466 in June but still below the numbers in July 2022. While sales remain below the 10-year average by about 15%, they have increased by approximately 30% compared to the previous year. This growth can be attributed to the impact of the Bank of Canada’s rate hike announcement in July 2022, which led to a slowdown in market activity at that time.
The Sales-to-New-Listings Ratio
To gauge the market’s direction and assess the advantage for buyers or sellers, we calculate the sales-to-new-listings ratio. A ratio below 40% favors buyers, a ratio above 55% favors sellers, and anything in between indicates a balanced market. In July, the sales-to-new-listings ratio was 52.2%, a slight decrease from June’s 55.5% and May’s 59.7%. This suggests that the market is currently in a relatively balanced state.
The Sales-to-Active-Listings Ratio
Another crucial indicator is the sales-to-active-listings ratio, which provides insight into the market conditions. A ratio below 12% favors buyers, a ratio above 20% favors sellers, and anything in between signifies a balanced market. In July, the sales-to-active-listings ratio was 24.9%, down from June’s 31.4% and May’s 38.4%. This further supports the notion of a shift towards a balanced market.
Analyzing the sales-to-active-listings ratio by property type reveals a divergence between single-detached homes and other residential properties. For single-detached homes, the ratio is 16.5%, while for townhouses and condominiums, it is 32% and 30.6% respectively. This discrepancy indicates that the market dynamics differ significantly across different property types.
In terms of home prices, the composite residential benchmark price in Greater Vancouver reached $1,210,700 in July. This represents a 0.6% improvement from the previous month and a 0.5% increase compared to July 2022.
Breaking down the benchmark prices by property type, single-detached homes had a benchmark price of $2,012,900, townhouses had a benchmark price of $1,104,600, and condominiums had a benchmark price of $771,600. These figures reflect increases ranging from 0.5% to 1.1% compared to June and between 0.6% and 2.6% compared to the same time last year.
Elton Ash, Executive Vice President of RE/MAX Canada, highlights the unique nature of the Vancouver market, characterized by high equity. This factor contributes to the reluctance of homeowners to sell if they cannot achieve their desired price. Additionally, pent-up buyer demand, particularly in condominiums and townhomes, is expected to drive prices higher in the Lower Mainland.
Industry experts, including Elton Ash, anticipate an increase in inventory during the months of October and November. This influx of listings is likely to boost sales volume; however, market activity may remain subdued until then. The Bank of Canada’s upcoming policy interest rate announcement on September 6 will continue to shape the market’s temperature and influence buyer and seller behavior.
In conclusion, the Greater Vancouver real estate market shows signs of balance, with positive year-over-year growth in sales and new listings. The sales-to-new-listings and sales-to-active-listings ratios indicate a relatively stable market. Home prices, especially in the high-equity market segment, continue to rise, fueled by pent-up buyer demand. As we move forward, it will be interesting to see how the market evolves and how external factors, such as the Bank of Canada’s policies, impact the real estate landscape in Greater Vancouver.
Disclaimer: The information provided in this article is based on the latest statistics published by the Real Estate Board of Greater Vancouver. Please consult a professional real estate advisor for personalized advice and insights.